Reasons for writing a policy in trust


Many Financial advisers fail to put policies “in trust” thereby compounding clients financial problems rather than alleviating them.

Trusts have been instrumental in controlling vast amounts of wealth for years.

Trusts are still considered an important tax-planning tool. With the correct structure, a trust can offer tax planning and wealth preservations solutions ensuring that you can preserve your family’s wealth, and help to reduce UK families’ exposure to Inheritance Tax (Death Duties)

There are many reasons for writing a policy in trust but a key one is that a trust can be used to preserve wealth for future generations. By placing assets in trust, the creator of the trust (the settlor) can provide a degree of financial security for the immediate family and beyond.

A suitable trust can give parents and grandparents peace of mind as regards the well-being of future generations.

Transferring an asset (such as an offshore life policy) into trust will change the legal ownership of that asset. This invariably changes the taxation of the asset, which creates a number of important tax-planning opportunities.

Therefore, a policy written in trust is legally owned by the trustees. It does not then form part of the original policyholders’ estate on death and will pass directly to the beneficiaries rather than being tied up in probate.

If a life assurance policy is not written under trust, the value of the policy will form part of the policyholders’ estate should the policy come to an end as a result of the death of the policyholder resulting in a potential Tax liability

One of the most effective uses of the trust/offshore bond combination is for IHT mitigation. Gladstone Morgan works in conjunction with many providers and can offer a number of trust structures that have been designed to reduce the exposure to IHT. A number of these structures allow the creator of the trust to have access to all, or a portion of, the trust capital.

To find out which trust is most appropriate for you and to know more about how trusts can ensure you retain your wealth for you and your family, speak to one of Gladstone Morgan’s advisers.

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It should be noted the services available from Gladstone Morgan Limited will vary from country to country. Nothing in the comments above should be taken as offering investment advice or making an offer of any kind with regard to financial products or services. It is therefore important to reinforce that all comments above are designed to be general in nature and should not be relied upon for considering investment decisions without talking to licensed advisers in the country you reside or where your assets may located. Gladstone Morgan Ltd is not SFC authorized. Gladstone Morgan Ltd in Hong Kong is licensed with the Hong Kong Confederation of Insurance Brokers.